Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
General Discussion
Showing Original Post only (View all)Ultra Low Interest Rates A Threat To Social Security [View all]
In perhaps 2-3 years new contributions to the Social Security trust fund will end and withdrawals from it will begin. The longevity of SS trust fund depends in large part on how its growth from interest exceeds its net outflow to existing SS recipients... the bigger the interest return, the longer the fund will last. But there is no floor on the interest rates the fund gets and the average interest rate for the entire fund in 2000 was 6.9%. Today it's 3.4% https://www.ssa.gov/oact/progdata/annualinterestrates.html
The average for the entire fund is being brought down by the ultra low interest rates set by the FED which brings down the rate US Treasuries get... and in this case the special treasuries the government issues to the SS fund. The formula was created by Congress in 1960 https://www.ssa.gov/oact/progdata/intrateformula.html and certainly Congress can change it.
Here are the rates any new money has been getting when it enters the fund: https://www.ssa.gov/oact/progdata/newIssueRates.html
In 2012 the average annual average interest for new monies was only 1.458% when according to http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ the inflation rate was 2.1%!
SS was losing ground.
In 2013 the new monies were getting 1.9% and the inflation rate was 1.5%... a pathetic .4%.
WHY AREN'T THE DEFENDERS OF SOCIAL SECURITY RAISING THE ALARM BELLS?
Workers are involuntary taxed to provide mainly for their retirements and yet that goal is being undermined by politicians OF BOTH PARTIES. The SS trust fund has been a cash cow for politicians for too long. It MUST be treated with respect. There must be a floor beneath which the interest can not fall. I believe that should be at least 4%.
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
57 replies, 8067 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (9)
ReplyReply to this post
57 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
From previous reports. Just because they're not online does not mean they do not exist.
jeff47
Mar 2016
#41
Well, yeah Congress can always amend the SS Act. But until they do that, it's pretty much a market
Hoyt
Mar 2016
#28
I think they have driven rates down in the hopes of spurring job creating business.
Hoyt
Mar 2016
#29
And it hasn't worked well because of other issues that only Congress, not the Fed, can address.
strategery blunder
Mar 2016
#47
Agreed. Allowing giant banks to borrow money for free from the taxpayers without no requirement
GoneFishin
Mar 2016
#51